If you have lost jobs or have been unemployed for quite some time now then there are rare chances of getting a loan. Only a few kinds of loans are available for people with no job. Loan providers offering loans may actually charge an exorbitant amount of interest from you. Unless you have a good credit history and are truly reliable, the companies would show hesitation in lending you money.
Having said that you should not assume that you will not get loans from anywhere. Although the options would be fewer, you will find lenders offering you a loan with a demand of higher interest. For this, the first step would be to improve your credit history. Take all the measures that corrects your credit file so that you are not refrained from getting loans in the future. This is a preventive measure for all borrowers.
Another factor to keep in mind is the frequency of loan applications. If you apply frequently then it leaves an impression that you have no money to fulfil small requirements as well. This will, in turn, suggest that you are unable to payback and so, chances of getting a NO from the provider increases. You can check from freepricecompare.com about your eligibility for a particular loan. Apply if you are eligible or else it will create a footprint on your credit file pointing to a bad credit score.
Types of loans for unemployed people:
Payday loans: Unless it is an absolute emergency, one should not go for payday loans. Even if you are expecting a loan in the near future, a payday loan is not the best idea. The lenders will give you money without any credit checks, but will charge interest that are 1000% more than other loan providers. The interest rate can go even higher and ultimately puts you under a big debt.
Credit Unions: Social groups can lend you money at low interest, provided you are a member of that group. If you are not a member of any social group then it would be wise to become one. Use freepricecompare.com to get details about various credit unions in the UK.
Doorstep loans: This is a specialised loan service where in you need to apply online. A representative from the loan provider will come to your house for your interview. If you are approved, then someone from the company will deliver money at your doorstep. This seems as an easy solution, but may prove to be really costly. The repayments will be picked from your by representative of the lending firm. You can try this as the last resort, but still think twice.
Secured or guarantor loans: You can borrow money by keeping some of your property at stake. You must consider the risk associated with this case. In case you are unable to pay back the loan, then the lender can acquire your property. So, make sure you take a secured loan only if you are sure of getting a job.
A Guarantor loan could get you money if someone from your friends or family assures that if you cannot pay the loan, then he would do it as an individual responsibility. The lender can actually drag him to court to recover money in case he does not pay back the loan amount.
Bank overdrafts: For people with a good credit history, their bank can make an arrangement for overdraft which gets you money without any interest. However, this facility will be available for a short period of time only, but is a much better option than payday loans and other options that may turn out to be troublesome.
Government support: The government offers some interest free budgeting loans but is available to people going through difficult circumstances and are in urgent need of money. You can check online to find more details about budgeting loans. Find out the benefits you are entitled to and then think about this alternative of borrowing loan.
Credit card: Your card can get you a chance to borrow at 0% interest rate. This can be for a limited period only and depends on the credit history. Again, you need to pay the minimum monthly repayment amount.
Pawnbrokers: People without an employment can think about this option where you need to deposit an item as a security deposit. The lender will give you a document that outlines the credit agreement. These are short term loans with maximum borrowing period of seven months. Governed by National Pawnbrokers Association, there are some rules and regulations that need to be followed in this case.
Meanwhile, you should put efforts to improve your credit history and take advice from local agencies like the Citizens Advice Bureau, StepChange Debt Charity or National Debtline. For more details on loans, check freepricecompare.com. You can check our loan guidelines or call us on 02034757476.